Royal revamps DaVinci handhelds

The office supply firm is expanding its line of digital
organizers but some analysts question whether the company's low-price strategy will succeed over the long haul.

January 2, 20024:43 PM PST

Office supply firm Royal is expanding its line of digital
organizers, introducing a new version of its DaVinci handheld and launching
the DaVinci Pro, but some analysts question whether the company's low-price
strategy will succeed over the long haul.

Royal established itself making
typewriters, paper-shredders, calculators, and other basic office supplies. It entered the PDA business last fall just as the market exploded, driven by
the popularity of Palm Computing's
PalmPilot, and a broad range of devices based on Microsoft's Windows CE operating system.

While these companies stuffed more features into their products over the
last year, Royal has concentrated on offering a stripped-down, sub-$100
digital organizer. The DaVinci didn't need to be a giant slayer, the
company reasoned, but could achieve moderate success by grabbing a portion
of the handheld market, which is estimated to be around 665,000 unit
shipments by 2000, according to market research firm International Data Corporation.

When Palm first introduced the PalmPilot, the device was lauded for the
simple interface and ease of use. Since that time, Palm and third party
developers have offered everything from scaled down Web content to email
readers for the platform. Windows CE manufacturers and developers have
concentrated on adding support for color displays and wireless connectivity.

Now, Royal is also slowly adding bells and whistles to its device,
introducing the revamped DaVinci, and the new DaVinci Pro. But as Palm and
Microsoft keep introducing new features and devices, the prices on
existing devices have come down to the point where an independent player
like Royal may be squeezed out of the market, said Gerry Purdy, editor of
industry newsletter Mobile
Insights.

"If you want a Palm, they have a price point and a product that will work
well for you," Purdy said. "From Royal's standpoint, they probably have a
good product in design, but the real issue is marketing: how you build
credibility and how you build brand."

The current duopoly in the handheld market, "does make it difficult for a
company to get significant play in the marketplace," Purdy said, noting
that other players will soon begin offering sub-$100 units, as well, such
as Handspring, a start-up company formed
by the founders of Palm Computing. "Handspring has said that the one thing
they're going to do is build products for under $200. Royal has a tough row
to hoe," Purdy said.

Royal is expanding the memory on the $99 DaVinci to 2MB, comparable to the
Palm III and newly introduced Palm V. Most Windows CE devices feature
around 4MB of memory. In addition, the company is pre-loading software from
CompanionLink which allows
DaVinci users to synchronize their data with Microsoft's Outlook
productivity suite.

DaVinci, which offers limited handwriting recognition and an optional
palm-sized keyboard, also includes a feature called FlashNotes, which lets
users save handwritten text or drawings. The revamped DaVinci will begin
shipping next month, Royal said.

The $149 DaVinci Pro, which was first demonstrated this year at the
Consumer Electronics Show in Las Vegas, offers direct email and fax
capability, along with the organizer features of the entry-level DaVinci.

The DaVinci Pro includes a cradle with a slot for PC card modems, which in
turn allows limited email and fax functionality, Royal said. Modems for the
device will be sold separately. The DaVinci Pro will be available this summer.